Lawmakers failed to meet the April 1st deadline for filing the state budget for 2021-022. Looming tax increases seem to be a point of contention among even the Democratic super majority. Remote negotiations due to the pandemic are also sited as a main cause of the delay.
State Budget boss Rob Mujica explains, “The complication is, you know, not being in the same rooms as a result of COVID, having to do things remotely. That obviously adds to the complexity of the negotiations.”
New York State was running a large deficit prior to the pandemic which has only exasperated state cash flow. Lawmakers did manage to agree to a debt-service bill, paying off the short term debts incurred last year when income tax filing was delayed three months.
Wealthy New Yorkers should expect some increase in tax rates. A 1% capital gains tax is likely to be part of the budget along with 1.03% tax increase on millionaires.
State Budget Director Mujica also had this to say:
“A lot of these are one-time costs to deal with the recovery, and as we recover, the need for some of these items go away, and then there are recurring items. That’s what we’re working on with the Legislature right now. But again, there is a tipping point. We don’t know exactly what that is. We know a lot of New Yorkers have left New York. We know that the unemployment rate right now is relatively high. And whatever we do on the tax side, we want to make sure, right, that we’re striking that balance with funding the items for the recovery, but at the same time, not discouraging job growth and not discouraging those jobs from coming back to New York.”
Most state officials agree that the budget should be passed sometime this month.
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